The South China Sea issue began as a territorial dispute over the sovereignty of the islands and sea territory involving China and five ASEAN countries, Vietnam, the Philippines, Malaysia, Brunei and Indonesia. Both China and Vietnam claim the entire area and the islands within while the Philippines, Malaysia and Brunei have laid claims to contiguous areas based on EEZs and continental shelves and first discovery. Had it been just a territorial issue it could have been resolved in some way as a product of Chinese efforts to reach out to ASEAN and to forge stronger ties with the region. Later the issue involved access to the oil and gas reserves of the sea which became critical as global demand for energy rose and claimants devised plans to exploit the hydrocarbon reserves of the area. Disputes erupted over the competing claims, particularly between China and Vietnam, which at times threatened to escalate. Claims to energy resources need not result in conflict, however, and can be managed on the basis of joint or multilateral development for which there are various precedents and models though none quiet as complicated as would be required for the South China Sea.

Another factor has exacerbated the situation since 2010 which makes it more difficult to resolve or manage according to the approaches that have previously been discussed. The issue has gone beyond territorial claims and their resolution and has also eclipsed the concern over access to energy resources. The South China Sea is steadily becoming a issue for China’s rivalry with the US which increasingly shapes its attitudes and policies. It is becoming linked with wider strategic issues relating to China’s naval strategy as it develops a power projection capability to protect its far flung sea lanes to the Middle East. It is also becoming an issue for America’s forward presence in the Western Pacific and its alliance relationships within the region. What is required at this stage is a multilateral agreement on measures to prevent minor incidents from escalating into conflict pending a resolution of the conflicting claims. This agreement should include the two major protagonists, the US and China as well as the ASEAN claimants.

The evolution of the South China Sea dispute

The South China Sea began as a dispute over maritime claims. Vietnam, Malaysia and the Philippines have laid claims to the area and were able to occupy islands which China could not, constrained as it was by the US and Soviet navies during the Cold War. Two principles govern the claims both which work against the Chinese claim to the entire area. One is “effective occupation” of islands, a precedent which was laid down by the Permanent Court of Arbitration in the Island of Palmas case in April 1928.[i] Effective occupation entails an ability and intention to exercise continuous and uninterrupted jurisdiction which is distinguished from conquest. The doctrine of effective occupation goes against Chinese interests in the Spratly Islands though not in the Paracels, since China cannot demonstrate continuous and uninterrupted jurisdiction over the area, though it can do so for the nine islands it has occupied since 1988-92. The second is UNCLOS which lays down the rules to decide claims to resources based on EEZs and continental shelves. UNCLOS does not support the Chinese claim which goes beyond its EEZs or continental shelf so China has insisted that historical rights should be accepted. The problem is that claims based on history do not carry much weight in international law and from the Chinese perspective international law downgrades China’s ancestral heritage and is a source of resentment. The Chinese attitude is that their claim predates UNCLOS and that China is not “bound by it’ in this situation. Some Chinese officials argue that the inconsistencies within UNCLOS would allow China to assert its historical claims in any case.[ii] To assert those claims in a situation where the complexity of international law may not support them China has resorted to constant diplomatic pressure to achieve either a revision of international law, or a special exception to it, where its ancestral claims would be recognized by all.

Oil and energy

Had the South China Sea been just a territorial dispute there could have been various ways to resolve the issue on the basis of an adjustment of claims in a maritime regime. It could also have continued as a stalemated situation in the absence of a pressing need for a resolution. The demand for energy, however, meant that China could not live with the status quo in the South China Sea which placed additional pressures on the ASEAN claimants. The global demand for energy is rising and the major consumers such as China are seeking new sources to satisfy their expanding economies. China’s oil imports reached 54% of consumption in 2010 and are slated to reach 65% in 2015. China has attempted to diversify energy supplies to reduce its dependence upon the Middle East, which supplies 58% of its oil imports, by seeking to exploit the energy resources of the area. Vietnam is the major oil producer in the area, the state owned oil company PetroVietnam produced 24.4 million tons in 2010 from three fields; the White Tiger field which first began production in 1986, the Blue Dragon field and the Big Bear field; together they accounted for 26% of Vietnam’s oil production in 2010.[iii] PetroVietnam has also concluded 60 oil and gas exploration and production contracts with various foreign companies in an effort to exploit new fields. Production in the established fields is declining, however, but new fields are not expected to compensate for the loss.[iv] As Vietnam attempts to exploit new fields there is the possibility of renewed clashes with China which has consistently opposed its attempts to conclude exploration agreements with international oil companies. China protested against the exploration activities of a consortium including PetroVietnam, Malaysia’s Petronas Carigali, Singapore Petroleum and American Technology Inc. when it discovered a new offshore oil field west of Hainan Island in October 2004.[v] China has warned international oil companies to stay out of what it calls “Chinese waters;” five concessions involving BP, ConocoPhillips, Chevron-Petronas-Cargill, Idemitsu-Nippon-and Teikoku oil were suspended as a result of Chinese pressure.

The rise of crude oil prices and concern about energy supplies motivates the claimants to exploit the energy resources of their claim zones. The Philippines has attempted to boost self sufficiency in oil production and has set a target of 60% by 2011. It intends to offer 15 exploration contracts for offshore exploration off Palawan in an area claimed by China.[vi] Philippine exploration efforts around Reed bank have previously provoked Chinese protests and will no doubt do so again.[vii] In 2011 the Philippines reported seven incidents involving Chinese harassment; on 2 March two Chinese patrol boats harassed an oil exploration ship in the Philippine claim zone 250 kms west of Palawan, they left the area after Philippines air force was scrambled. On 5 April the Philippines lodged a formal protest at the UN and sought ASEAN support in the forging of a common position over the issue.[viii] The Chinese on 14 April accused the Philippines of “invading” its waters.[ix] The Philippines dispatched the Rajah Humabon, a World War 2 vintage naval vessel, to its claim area after China deployed the Haixun-31 a 3,000 ton maritime patrol ship with a helicopter to the area.[x] The Philippine vessel removed markers placed by the Chinese on various features in the Philippines claim zone including Boxall reef, Amy Douglas Bank and Reed Bank.[xi] In June the President’s Office announced the renaming of the South China Sea as the “west Philippine Sea,” and announced a naval expansion program which would boost its limited naval presence in the area.[xii] Vietnam fared no better and on 26 May two Chinese maritime surveillance vessels cut off the exploration cables of a Vietnamese oil survey ship which were towing a submerged 7 km seismic cable while searching for oil and gas deposits; this was in block 148 120 kms off Nha Trang, in Vietnam’s EEZ; the Vietnamese Foreign Ministry released videos of a Chinese vessel actually breaking the cable attached to the Vietnamese vessel Binh Minh.[xiii] A Chinese Foreign Ministry spokeswoman Jiang Yu declared that the Chinese vessels had engaged in “completely normal marine enforcement and surveillance activities in China’s jurisdictional area.”[xiv] On 9 June a Chinese fishing boat in similar fashion rammed the survey cables of another Vietnamese survey vessel. China has complained that the other claimants have intruded into its waters and that the incidents have been increasing. Vietnam and the Philippines plan to go ahead with gas exploration projects; PetroVietnam will work with Talisman energy and will begin drilling in an area that China awarded to Crestone corporation in 1992, which is now operated by Harvest Natural Resources. Exxon also plans exploratory drilling off Vietnam while the Philippines intends to drill in the field where Chinese vessels harassed its survey vessel in March 2011[xv]

India has become involved as an external player which complicates the situation. China may have leverage over the ASEAN claimants by reason of size and proximity but India has the status and power to resist. India has, moreover, accumulated resentments against China for its support of Pakistan and its claims along the common border that will make it more difficult for the Chinese to manage. India’s ties with Vietnam date back to the time of Indira Gandhi in the early 1980s and many in India regard Vietnam as an ally against China. The Indian naval vessel the INS Airavat which was moving towards Nha Trang on 22 July was warned by a Chinese radio message to keep out of “Chinese waters.” The Indian Foreign Ministry declared however that "India supports freedom of navigation in international waters, including in the South China Sea, and the right of passage in accordance with accepted principles of international law."[xvi] China has protested against the exploration activities of India’s Oil and Natural Gas Corp [ONGC] around the Paracel Islands to which the Chinese are particularly sensitive. ONGC takes the view that that Vietnamese claims are in accordance with international law and that it would continue with exploration projects in two blocks near the Paracel Islands.[xvii] While Vietnamese President Truong Tan Sang was visiting New Delhi an oil exploration agreement was concluded between ONGC and PetroVietnam on 12 October, despite Chinese opposition. [xviii] Significantly, this agreement was concluded while Party’s General Secretary Nguyen Phu Trong was touring Beijing and professing friendship with the Chinese.[xix] Vietnam was resorting to its traditional way of dealing with China by stressing commonalities and friendship, which was the job of the party general secretary, while seeking an effective counterbalance.

[i]On the legality of the claims see Mark J. Valencia, Jon M. Van Dyke, Noel A. Ludwig, Sharing the Resources of the South China Sea, pp. 39-59; R. Haller-Trost, The Spratly Islands: A Study on the Limitations of International Law, Centre of Southeast Asian Studies, University of Kent at Canterbury, Occasional Paper No. 14October 1990

[ii]See cable by Political Minister Counselor Aubrey Carlson “MFA Maintains Claims to South China Sea; Urges US Companies not “to get Entangled,” 13 March 2008, Wikileaks on line.

To stimulate South China Sea regional security cooperation in the control of piratical attacks against ships, this paper proposes the establishment of a limited purpose maritime and air defence identification zone over the South China Sea.

The Philippines recently passed a 2009 Baselines Law that, it was hoped, would finally confront its long-standing dilemma on whether to abandon its 1898 “treaty lines” altogether and adopt the modern rules on the Law of the Sea. That hope did not come to pass.

The interplay of power and law in the South China Sea is not well understood. To analyze the disputes over navigation rights, sovereignty to islands, and delimitation of maritime zones we need to grasp how states define and defend their geopolitical interests as well as the ways in which international law influences their claims and conflict behaviour. This paper starts with the huge difference in interpretations made by geopolitically oriented political scientists and more normatively or legally oriented scholars. Then the paper asks how developments in international law have affected the conflicts in the South China Sea historically. It establishes parallel histories of alternation between periods of conflict and détente and of legal developments, both in customary and treaty-based international law. The main emphasis is on the law of the sea. The paper concludes by establishing causal linkages between the two histories, while seeking to ascertain in what ways the law as such has influenced conflict behaviour. Has it exacerbated disputes by encouraging conflictual claims? Or has it established rules and procedures that help manage or resolve conflicts? The paper is written on the assumption that the answers we give to these questions may influence the way we see the prospects of future peace in the South China Sea.

Much of the legal discussion about the ongoing situation in the South China Sea focuses upon the United Nations Convention on the Law of the Sea (UNCLOS)[1], a convention that was concluded in 1982. During that early 1980's timeframe, there was an iconic television commercial[2] in the United States promoting the fast-food chain of restaurants known as Wendy’s. The commercial showed three little old ladies standing at a cash register of a fictional restaurant that was competing with Wendy’s. Behind the ladies was a sign on the wall that read, "Home of the Big Bun." On the countertop was a large hamburger bun with an extremely small meat patty. Each of the old ladies stared intensely at the bun. Two of the ladies were admiring the bun. The middle lady said, "It certainly is a big bun. It's a very big bun. It's a big fluffy bun. It's a very big fluffy bun." The lady on the right, however, was wholly unimpressed with the large bun. Over and over, she kept yelling "Where's the beef?" across the counter to anyone who might listen. At the conclusion of the television commercial, as the screen faded to black, the viewer could hear the third lady doubtfully telling her colleagues, "I don't think there is anybody back there."

Since 1999, China has enacted an annual fishing ban for two or three months in the summer in the North-Western part of the South China Sea. This year (2011), the ban took place from May 16th to August the 1st and in an area between the latitude 12° North to the North and longitude 113° East to the West.[1]Any fishing vessel that goes into this area during the banis subjected to fines and its catches and gear confiscated.[2]According to Chinese news and scholars, this fishing ban is necessary to protect the sustainability of marine life in this area and prevent overfishing[3] and has produced positive results[4].However, critics, including from China, question the effectiveness of this measure. Many commercially important fishes are not breeding at the time of the fishing ban. Furthermore, after a long pause due to the ban, fishing activities would increase manifold, which causes more risk of depletion of the stocks.[5]

The South China Sea is a semi-enclosed sea governed by Part IX of the Law of the Sea Convention,[1] which says in Article 123 that countries bordering such seas “should co-operate with each other in the exercise of their rights and the performance of their duties under this Convention” More specifically, they are instructed to “endeavor, directly or through an appropriate regional organization (a) to co-ordinate the management, conservation, exploration, and exploitation of the living resources of the sea” and also to co-ordinate their activities “with respect to the protection and preservation of the marine environment.” The countries bordering on the South China Sea have failed to create an effective regional organization, and their cooperation “directly” has been generally unsuccessful as well. The Coordinating Body on the Seas of East Asia (COBSEA) has been mostly dysfunctional and the Partnerships in Environmental Management for the Seas of East Asia (PEMSEA)has been modest in its accomplishments. No effective organization to manage the shared fisheries has been established.

The disputes in the South China Sea could be categorized into two parts: one is on the sovereignty of those island features, and the other is the maritime zones that could be claimed. It is understandable that the best way to solve the disputes might be delimiting boundaries so that the areas of sovereignty and jurisdiction could be decided. However, such situation is not always possible. It is mainly because negotiation and adoption of a maritime boundary between the related States always focused on political considerations and there are no well-established laws for making boundaries. Although it is recognized that “equitable solution” is one of the most important principles in making boundary. However, there is no definite elements which have been decided, in spite of geographical and geological factors, coastal length, traditional fishing activities, relative impact on the livelihood and economic dependency are the considerations recognized in different cases.

The efforts to develop cooperation for regional security and development, so far, has involved some formal approach of ASEAN and some informal approach by academic institutions and some informal unofficial approach by some South China Sea officials in their personal capacities. The formal approach has resulted in the Declaration of Conduct by the Foreign Minister of ASEAN and China in 2002 as well as by China and the Philippines, the Philippines and the Vietnam in formulating some confidence building measures or Code of Conduct between them. The informal approach has been initiated by Indonesia through the Workshop Process on Managing Potential Conflicts in the South China Sea since 1990. It should be noted however, that while the formal approach excludes Chinese Taipei in the process, but include Myanmar as an ASEAN Member although it is not located in the South China Sea, the second informal approach, however, includes Chinese Taipei as an “entity” in the South China Sea issues although no states around the South China Sea area has any diplomatic relations with the Chinese Taipei.

The South China Sea issue began as a territorial dispute over the sovereignty of the islands and sea territory involving China and five ASEAN countries, Vietnam, the Philippines, Malaysia, Brunei and Indonesia. Both China and Vietnam claim the entire area and the islands within while the Philippines, Malaysia and Brunei have laid claims to contiguous areas based on EEZs and continental shelves and first discovery. Had it been just a territorial issue it could have been resolved in some way as a product of Chinese efforts to reach out to ASEAN and to forge stronger ties with the region. Later the issue involved access to the oil and gas reserves of the sea which became critical as global demand for energy rose and claimants devised plans to exploit the hydrocarbon reserves of the area. Disputes erupted over the competing claims, particularly between China and Vietnam, which at times threatened to escalate. Claims to energy resources need not result in conflict, however, and can be managed on the basis of joint or multilateral development for which there are various precedents and models though none quiet as complicated as would be required for the South China Sea.

The South China Sea (SCS) dispute has proven to be a hotbed for a variety of juridical quarrels, ranging from the extent of maritime zones[1], to territorial insular claims[2] and navigational rights.[3] One of the outlying issues that warrants closer examination concerns the baselines to be drawn around mid-ocean SCS islands.[4] As a starting position, one would surmise the applicability of the regime of normal baselines in accordance with the United Nations Convention on the Law of the Sea.[5]

Maritime security is a relatively new concept and there are several approaches on its definition within the overall concept of security in international relations. Maritime security is developed to emphasize the importance of maintaining good order at sea in terms of the use and management of the marine resources for human development. In a hotspot like the South China Sea, where sovereignty disputes and overlapping maritime claims are still escalating and complicated, the maintenance of maritime security is a vital issue, covering all aspects of traditional and non-traditional security. With regard to traditional security, the current tension and the modernization of army, particularly navy forces indicated that the parties had prepared for the use of force and armed conflict at regional level may occur. In non-traditional aspects, maritime and aviation safety, marine environmental protection, marine biodiversity and the maintenance of good livelihood for the people are among the fields that currently being seriously threaten.

Every coastal nation attempts to expand its sea territory by extending or expanding exclusive economic zone to the maximum possible. The EEZ was a new concept and a specific legal regime in the Law of the Sea Convention, building on the “exclusive fishing zones” and “fishing conservation zones” already in existence. The EEZ regime in the Convention was primarily aimed at living resources of the waters superjacent to the seabed. Although Article 56 (1) (a) stipulates that in the EEZ, “the coastal State has sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to the seabed and of the seabed and its subsoil,” Article 56 (3) affirms that the rights set out in this article with respect to the seabed and subsoil shall be exercised in accordance with Part VI.” The EEZ is and must be an environmental conservation concept: However, it is far from such a novel concept in reality. It is considered or interpreted as the coastal State’s privilege to claim its sovereign sea. Rights without obligations or duties have been claimed, rather blindly. This is something pathetically wrong or very ridiculous. Under the circumstances, 200 nautical miles of exclusive economic zone has been rather abused.

The recent escalation in tension in South China Sea has indicated the need for objectively looking at the causes of dispute and the recent developments both negative and positive with a view to suggest measures todiffuse the situation, which according to some security experts has the potentials to escalate into an armed conflict and to help the involved nations to find a permanent solution.

Located in the heart of Southeast Asia, the South China Sea is a semi-enclosed sea surrounded by China and several smaller and weaker Southeast Asian powers such as the Philippines, Vietnam, Malaysia, and Brunei. Since the mid-1970s, these littoral states have been locked in a chronic competition as each one seek to extend its sovereignty and jurisdictional claims over more than a hundred islets, reefs, and rocks and their surrounding waters. The biggest among the claimant states, China has shown propensity to use coercive diplomacy and even actual force to pursue its territorial claims. In 1974, its forces drove the South Vietnamese from the Paracel Islands north of the Spratlys. Then in 1988, Chinese forces dislodged Vietnamese forces from Johnson Reef, after they sunk three Vietnamese trawlers near Fiery Cross Reef. China’s promulgation of a territorial law claiming a large portion of the South China Sea in 1992, and Manila’s discovery of Chinese military structures on Mischief Reef in 1995 triggered a serious diplomatic row between the Philippines and China in the mid-1990s.

In March 2010[1], Chinese diplomats told senior Obama administration officials that China (People’s Republic of China: PRC) would not tolerate any interference in the South China Sea, now part of China’s “core interest” of sovereignty. The People’s Liberation Army (PLA) navy and the Chinese maritime security agencies have begun to deploy their battleships and patrol boats in the South China Sea. Tensions between China and its Southeast Asian neighbors are on the rise. The United States, Japan, and Australia also show concern for the security of Sea Lines of Communication (SLOC) in the South China Sea. It is also said that the PLA navy has a plan to develop aircraft carriers. This paper analyzes these maritime challenges and explores implications for the security cooperation between China and its neighboring countries including Japan and the United States.